Loans

• EBRD loans to private sector projects range from EUR 3 million to EUR 250 million; the average amount is EUR 25 million
• Basis for a loan is the expected cash flow of the project and the ability of the client to repay the loan over the agreed period
• Fixed or floating-rate: Fixed-rate basis linked to a floating rate such as LIBOR; floating-rate basis with a cap or a collar
• Senior, subordinated, mezzanine, or convertible debt
• Denominated in major foreign or local currencies
• Short- to long-term maturities up to 10 years
• Project-specific grace periods may be incorporated
• Fees:
  - Front-end commission (paid upfront)
  - Commitment fee (payable on the committed but undisbursed loan amount)
  - Prepayment: Cancellation and late payment fees are also charged if necessary

Other lending terms:

• Recourse to a sponsor is not required, however, the EBRD may seek specific performance and completion guarantees plus other forms of support from sponsors typically found in limited-recourse financing
  - EBRD requires project companies to obtain insurance against normally insurable risks, but does not require insurance against political risk or local currency inconvertibility
  - Financed companies are usually required to secure the loan with project assets
  - Typical project finance covenants are required as part of the loan package
  - Loan repayments are normally in equal, semi-annual instalments, though longer maturities may be considered on an exceptional basis (e.g., up to 15 years for large infrastructure operations)
  - EBRD can help manage financial risks associated with a project’s assets and liabilities, which covers foreign exchange risk, interest rate risk, and commodity price risk

Equity

• EBRD invests equity ranging from EUR 2 million to EUR 100 million in private sector projects; it expects a market rate return from its equity investments and only invests in minority equity positions
• Equity and quasi-equity investments include ordinary shares, preference shares, subordinated loans, redeemable preference shares, listed and unlisted, underwriting of share issues by public or privately-owned enterprises, and other forms can be discussed with EBRD banking staff
• EBRD also participates in private equity funds that focus on a specific region, country, or industry sector, have local presences, and are run by professional venture capitalists

Trade Facilitation Program

• Guarantees:
  - Letters of credit and standby letters of credit from the issuing bank
  - Deferred payment and “red-clause” letters of credit
  - Advance payment guarantees and bonds, and other payment guarantees
  - Bills of exchange and trade-related promissory notes
  - Bid bonds, performance bonds, and other contract guarantees
  - Longer tenors are approved (where appropriate) to cover finance of imported capital equipment and for other term guarantees
  - Other types of trade finance instruments can also be considered
• Revolving credit facility:
  - EBRD can also extend short-term loans to selected banks and factoring companies
  - Exclusively for the purpose of pre- and post-shipment finance and other financing of working capital necessary for the performance of foreign trade contracts and domestic and international factoring operations
  - EBRD can provide financing for domestic factoring activities, in local currencies in a number of countries